Germany deploys new measures worth $16.5Bn amidst rising energy costs

The ruling coalition of Germany aims to help businesses and households with temporary reduction on fuel costs

Germany’s ruling coalition has recently approved additional measures related to energy packages worth $16.5 billion.

The newly announced energy package will focus on reducing the pressure of surging energy costs and volatile fuel prices on businesses as well as households across the country.

According to Christian Lindner, Finance Minister of Germany, Chancellor Olaf Scholz’s government will cut fuel tax by $0.33 for gasoline and by 14 cents for diesel for the next three months. The announcement comes after officials from the three-party ruling alliance finally reached an agreement.

Moreover, Scholz’s Social Democrats alongside Lindner’s pro-business FDP and the Greens have agreed that taxpayers shall be provided with a one-time payment of up to $330 and $110 as a part of one-off provision for child support.

Meanwhile, the government will also issue a monthly ticket worth $9.93 with the primary goal of accelerating the use of public transport.

While Lindner has not specified the exact amount, the overall energy package is worth the same as that of the initial set of measures drafted last month – which Scholz believes would cost nearly $16.5 billion.

The multi-billion-dollar package will encompass subsidies for low-income groups, reduction of tax imposition to finance expansion of renewable industry, and increase allowance facilities for commuters, all of which will ultimately take the total cost of both packages to $33.07 billion.

Initially, the ruling parties were unable to see eye-to-eye with the second package since Lindner and FDP party favoured direct rebate of fuel prices at pumps and the Greens urged for aid focusing on the deprived groups.

Lately, Germany’s ruling coalition reinforced a pledge to reduce dependence on Russian energy imports while boosting the expansion of renewables. It has also launched a new campaign to support businesses and households become more energy efficient.

Source Credit: https://www.bloombergquint.com/markets/germany-to-cut-fuel-tax-to-help-ease-burden-of-energy-prices